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Montevideo, March 29th 2024 - 08:49 UTC

 

 

Brazil still the slowest growing emerging economy

Tuesday, January 2nd 2007 - 20:00 UTC
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The latest release from the Brazilian Central Bank, based on private sector estimates, downgraded to 2.74% the 2006 GDP expansion. For 2007 the estimate among a hundred leading business men and analysts is that the economy will grow 3.5%.

Last Monday, President Lula da Silva on taking office for a second four year mandate promised to "unleash" Brazilian growth which is the lowest among the leading emerging countries Inflation for 2006 was estimated in 3.11% and 4% for 2007, while the official Central Bank target is 4.5%. Private analysts also estimate that the basic lending rate in Brazil, Selic, currently at 13.25% should keep dropping to 12.31% next December. Trade surplus in 2007 is expected to reach 38 billion US dollars while the current account surplus in 2006 was 13 billion US dollars and is estimated in 6 billion US dollars for 2007. Direct foreign investment in Brazil in 2006 was 16 billion US dollars and should remain in the range of 16.1 billion US dollar in 2007. In 2006 Brazil had a record 46 billion US dollars trade surplus, with exports reaching 137.4 billion US dollars and imports 91.4 billion US dollars. The 2006 surplus is 2.8% higher than the 44.7 billion US dollars of 2005. Exports jumped 16.2% over 2005 and imports 24.2%. The strong boost in imports is attributed to the strong Real which appreciated 8.1% against the US dollar. However Brazilian exporters are pressing the Lula da Silva administration for strong measures to prevent the Real from continuing its appreciation spree. The exports' goal for 2007 is 143.5 billion US dollars. But in spite of the currency debate, strong demand from a world economy plus higher values for minerals and commodities has helped boost exports.

Categories: Economy, Brazil.

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